TANF Block Grant has Failed Families in Poverty
The 1996 welfare reform laws replaced the Aid to Families with Dependent Children (AFDC) program with Temporary Assistance to Needy Families (TANF) block grant. Some policymakers including House Budget Committee Chairman Paul Ryan want to use the block grant model to restructure other programs such as Medicaid and SNAP (foodstamps). The Center on Budget and Policy Priorities released a report this month on how states have spent federal and state funds under the TANF Block Grant. The results are not pleasing. Under the block grant model cash assistance to poor families has decreased and states have not been able to effectively respond to the large increase in families in poverty due to the recent economic crisis.
According to the CBPP report
The TANF block grant fundamentally altered both the structure and the allowable uses of federal and state dollars previously spent on AFDC and related programs. Under TANF, the federal government gives states a fixed block grant totaling $16.5 billion each year and requires them to maintain a certain level of state spending (totaling $10 billion-11 billion a year), based on a state’s level of spending for AFDC and related programs prior to its conversion to TANF in 1996. (This state funding requirement is known as the “maintenance of effort” requirement, or MOE.)
States can use their federal TANF dollars and state MOE funds to support a broad range of activities related to promoting the four purposes of TANF specified in federal law: assisting needy families so children can be cared for in their own homes or the homes of relatives; reducing the dependency of needy parents by promoting job preparation, work and marriage; preventing out-of-wedlock pregnancies; and encouraging the formation and maintenance of two-parent families.
Some of the key findings of the CBPP reports showed that states spent a relatively small percentage of TANF dollars on basic assistance and a significant amount to support other state services such as child welfare and to replace state funding in various programs.
Spending trends in some individual states have been even more dramatic. For example, while states overall spent only 29 percent of their total TANF/MOE dollars on basic assistance in 2011, nine states spent 15 percent or less on it, with four of these states spending less than 10 percent. Similarly, in 2011, states overall spent 18 percent of TANF/MOE funds in the combined AUPL/“Other Nonassistance” category, but 12 states spent more than 35 percent in this category and seven of those states spent more than 45 percent. While many of these may be worthy expenditures, the more broadly TANF funds are spread, the fewer resources are available to provide basic assistance and to fund work services and supports that can help recipients find and maintain employment.
In West Virginia in 2011, only 19% of funds were used for basic assistance and 15% of funds were used for AUPLE/”Other Nonassistance”.
The CBPP report found that
- Block grants may initially entice states with offers of flexibility but ultimately leave them worse off over time.
- Block grants can lead to substantial amounts of funding not being used for the purposes for which they were provided and serving instead to help fill state budget holes
- A block grant structure is incompatible with providing a safety net for poor families
- If a block grant’s funding level is not adjusted for inflation, states risk having the purchasing power of the federal funding they receive erode substantially over time.
- Maintaining a strong safety net for the most disadvantaged families and children has not been a priority of the TANF block grant for most states.
- There is substantially less accountability for federal funds under a block grant structure than under other shared federal-state funding arrangements.
- While block grants can have a superficial appeal, they are not a necessary or appropriate mechanism for providing basic needs-based assistance to low-income families and individuals on a large scale.
The TANF block grant has been a failure.
In 1995, for every 100 families nationally with children living in poverty, 68 received cash assistance through AFDC; in 2010, for every 100, only 27 families received cash assistance. According to the National Poverty Center’s report on extreme poverty in the United States, in 1996 about 10 % of households were living in extreme poverty (less than $2 a day per person) by 2011 that number had jumped to 20%.
In West Virginia in 1996, 14.5% of families in the state received cash assistance, in 2010 only 2.8% received cash assistance even though 25.5% of West Virginia children still live in poverty and 10.9% live in extreme poverty. These numbers show that the block grant was not the success that some policymakers claim. It has not helped to increase employment at a living wage; it has not supported families that are struggling to make ends meet. It has done nothing but punish the poor by warehousing us in community work programs, denying basic human rights, and forcing our families deeper into poverty without a safety net to help us. It has failed poor families in our state and in the nation.